What is Credit Insurance?
Trade credit insurance is a tool to reduce the risk of nonpayment by your customers. With growth in sales in domestic and international markets, companies and financial institutions are faced with increasingly higher risks of non-payment, constraints on working capital, and unacceptable concentrations of accounts receivable. Unpredictable changes in government policies towards foreign creditors, outbreak of wars, and/or revolutions, can put your overseas obligations at risk. Credit insurance is a risk management tool that can provide support for the trade expansion you seek.
Credit insurance is a risk management tool that can help protect a company’s commercial accounts receivable from the devastating effects of loss caused by the insolvency or protracted default of buyers. Credit insurance coverage is available for both domestic and/or export customers and provides flexible coverage that can be tailored to meet your needs. Coverage may be written to include all customers or may be targeted to cover only key buyers. The client determines the level at which a customer becomes a key customer.
Credit insurance comes in several different forms: Credit life insurance – the outstanding balance is paid in the event of your death. Credit accident and health insurance – monthly credit payments are made for you during periods when you are unable to work due to accident or illness. Credit unemployment insurance – monthly credit payments are made for you during periods when you are unemployed. Credit insurance is a form of insurance where you are the purchaser and the lender is the beneficiary. The payments will be made directly to the lender. Though lenders sometimes offer or forward offers of credit insurance, your acceptance or rejection of credit insurance normally is not used as a factor in deciding whether to extend credit to you. If the lender required credit insurance, the premium charged for the insurance must be included in the disclosure of the APR. In deciding whether to purchase credit insurance, consider other available forms of insurance (such as term life insurance or
Credit insurance is a way for consumers to insure loans and protect income so that what a borrower owes can be repaid even if the borrower dies, becomes disabled, or loses a job. Credit insurance can be purchased to insure all kinds of consumer loans including auto loans, credit card debt, loans from finance companies, and home mortgage borrowing.
Credit insurance is a tool for optimizing your business’ credit management. The approach will vary for different types and sizes of businesses in various sectors. We can cover a business’ whole turnover, wherever it may be trading, and will include political risks. Or we can cover a business’ key accounts or exceptional losses. We start with a thorough analysis of the needs of your business, during which all the options are examined to ensure that we come up with the most appropriate program, with no obligation on your part.
